Play Live Radio
Next Up:
0:00
0:00
Available On Air Stations
KPBS Midday Edition

San Diego Eligible To Pursue Low-Interest Federal Loan For Recycled Water Project

An engineer fills a container with recycled water at the Advanced Water Purification Facility at San Diego's North City Water Reclamation Plant, May 8, 2015.
Associated Press
An engineer fills a container with recycled water at the Advanced Water Purification Facility at San Diego's North City Water Reclamation Plant, May 8, 2015.

San Diego Eligible To Pursue Low-Interest Federal Loan For Recycled Water Project
San Diego Eligible To Pursue Low-Interest Federal Loan For Recycled Water Project GUEST: Brent Eidson, external affairs deputy director, city of San Diego Public Utilities Department

Our top story the federal government is said to give a big boost to the city of San Diego's Pure Water project. The city has been chosen as the applicant for the EPA's water infrastructure loan program if the deal goes through, it could mean half $1 billion for the city's effort to turn wastewater into drinking water. Joining me is Brent Eidson , external affairs deputy director, city of San Diego Public Utilities Department . Welcome to the program. Thank you. When the environmental protection agency chooses a city as applicant for this kind of infrastructure loan, is it likely the city will get it? In this case, it is likely. What they did was ask for letters of interest from different agencies who might be eligible applicants for the program. We were one of 43 and now one of the 12 using -- chosen. It means essentially that borrowing and we should receive the funding. Getting that loan will speed up the project? Ours is right on track. We will be online by the end of 2021 delivering 30 million gallons per day and about 50% of the water supply with or without this program. It really is a financial benefit. It doesn't have an impact on schedule. How much of a benefit is it going to be to get this cash from the federal government? This is a loan program. We are still pursuing other grant opportunities. This is a very low interest loan with longer-term repayment. When we are talking about project like this, we are also really looking at low interest loan to make sure that there is generational payment on the project that's going to benefit anybody. These projects are not cash finance. We don't have to go to the private market. We get to use low interest with loads that are going to be much more affordable and a lot more affordable for payments. I understand that the water reclamation plant is going to start construction next year, is that right which might We expect to start construction in 2018. We have six different components. Some will start in 2018 and some in 2019 but all will conclude by 2021. What is the overall cost of the first phase question mark We are estimating to be one $.2 billion. Considering the long past that San Diego has had with the EPA with the city asking for repeated waivers for an upgrade to the wastewater treatment plant, why is it surprising that they would extend this loan to the city? The EPA in the city of San Diego have been working collaboratively now for the past few cycles. Part of that collaboration included the EPA under siding with the city was attempting to do but offloading and reusing the water. If you go back to the Clean Water Act of 1972, you will see that those were one of the presences was to have incentives for agencies to use water recycling as a solution. For the past number of years EPA has been very supportive. This is not surprising. We were pleased to hear about it but not surprise. I know that the city was hoping for a permanent wave what is the status of these waivers? I know the plant is not needed -- meet federal water standards. It meets the standards but we achieved a waiver from two different constituents which is regulated under the Clean Water Act. They approved in April of this year. They approved it. We have our most recent waiver approved and we are continuing to operate the plant as we always have. It is not a permanent waiver? It is not. I think a lot of people don't understand this every single wastewater treatment plant in the country has to renew the permit every five years. We were looking for is a way to evaluate our future permit to be consistent. So that is the permanent thing that we are looking for. Even with the Carlsbad plant Sagola gets most of its water still from outside sources. How significant does the city believe that the Pure Water project is in terms of providing a sustainable water source? We think it's very significant. That is the primary reason that we are implementing this program. There's incredible benefits to reducing discharges. So it is a solution but the water challenges for the region continue. We are looking at the water program to help stabilize and have our own supply of water available so we can consider -- continue to have the quality of life that they desire. The reclamation project is going to cause water bills to go up? There will be cost increase. We have another year and a half before we start doing the analysis on those but we are not going to shy away. It will cost money but we think in the end the investment is worth the benefit. I been speaking with Brent Eidson, external affairs deputy director, city of San Diego Public Utilities Department . Thank you. Thank you.

The U.S. Environmental Protection Agency announced Wednesday that the city of San Diego is eligible to pursue a low-interest, $492 million federal loan to help fund the initial phase of its project to turn recycled water into drinking water.

The funding would ease ratepayers' financial burden for building a $1.2 billion purification plant in the Miramar area — a project set to break ground next year. The plant would provide 30 million gallons of water a day, which would be mixed in reservoirs with water from traditional sources.

The EPA loan would be about half of what the city could obtain for a bond on the open market. City officials and the EPA still have to negotiate the loan details before the funding is approved.

"This is a tremendous boost to our efforts to create an independent, drought-proof water supply for San Diego,'' said Mayor Kevin Faulconer. "By inviting us to apply for this loan funding, the EPA is showing its strong support for our Pure Water recycling program and providing us an opportunity to secure low-cost financing for one of the biggest infrastructure projects in city history.''

City officials hope to start delivering the recycled water to customers by 2021. By 2035, Pure Water is expected to account for one-third of the city's supply.

The EPA is making about $2.3 billion in funds available nationwide through its loan assistance program. Loans would be repaid over 35 years through revenues from the water and wastewater systems.